Original Title: Notice of the General Office of the People’s Government of Shandong Province Forwarding the Opinions of the Provincial Department of Information Industry on Accelerating the Development of the Software Industry (Lu Zheng Ban Fa [2003] No. 4)
Municipal People’s Governments, People’s Governments of All Counties (Cities, Districts), Departments of the Provincial Government, Directly Affiliated Agencies, Major Enterprises, and Institutions of Higher Education:
The Provincial Government has approved the "Opinions on Accelerating the Development of the Software Industry" issued by the Provincial Department of Information Industry. These are hereby forwarded to you for earnest implementation.
General Office of the People’s Government of Shandong Province
January 21, 2003
Opinions on Accelerating the Development of the Software Industry
Department of Information Industry of Shandong Province
(December 9, 2002)
To further accelerate the development of the software industry in our province and enhance the international competitiveness of our products, in accordance with the spirit of the “Notice of the General Office of the State Council Forwarding the Action Plan for Revitalizing the Software Industry Issued by the State Council Information Office” (State Council General Office Document [2002] No. 47), and in light of the actual conditions of our province, the following opinions are put forward:
I. Fully Recognize the Importance of Software Industry Development
The software industry is a foundational and strategic sector for the national economy and social informatization, and it is also the core and soul of the information industry. Vigorously developing the software industry can accelerate the transformation of the economic growth model and play a significant role in driving China’s economy toward leapfrog development. In recent years, with the continuous advancement of informatization and the widespread adoption of computer applications, our province’s software industry has entered a period of rapid development, achieving a certain scale of industrial growth and establishing a competitive edge in technical talent. Our province has thus become a major player in China’s software industry.However, overall, most software enterprises in our province remain small in scale; the engineering and industrialization levels of their development and production are low; integration with traditional industries is insufficient; their capacity to compete internationally is weak; and their ability to attract external enterprises, capital, technology, and talent is not yet prominent. The entire province must earnestly enhance its understanding of the importance of software industry development, concentrate its main efforts, adopt effective measures, increase support, prioritize the software industry, and strive to open up a new chapter in the development of our province’s software industry.
II. Guiding Principles and Objectives
(1) Guiding Principles. In accordance with the “Outline of the 10th Five-Year Development Plan for the Software Industry in Shandong Province,”the software industry in our province must adhere to the principles of market-driven development, enterprise-centered operations, and government guidance. It must fully leverage both domestic and international resources and markets, focusing on the key objective of using informatization to drive industrialization and achieve the optimization and upgrading of traditional industries. The primary directions of effort should be advancing the informatization of the national economy and society, meeting the demands of economic development, and transforming traditional industries. We must promote the growth of large enterprises and nurture small ones to achieve scale, expand openness to achieve internationalization, improve management standards to achieve engineering-oriented development, and optimize the development environment to achieve intensive development.
(2) Development Goals. During the “10th Five-Year Plan” period, the software industry must strive to establish a competitive advantage through scale. Electronic information technology will be widely applied in traditional industries, and the overall level of the software industry will rank among the top in the country. Software market sales will reach 30 billion yuan. Four major software parks—Qilu, Qingdao, Yantai, and Weihai—and the Shandong Provincial Software and Middleware Industrialization Base will be established; 10 large-scale software enterprises will be developed and strengthened;20 renowned software products with independent intellectual property rights will be cultivated; software export revenue will exceed US$200 million; the structure of the software professional workforce will be optimized to fundamentally meet development needs. By 2010, the software industry will be preliminarily established as a key pillar of the province’s information industry, becoming a major software production and export base in China, and Shandong will be built into a strong province in the software industry.
III. Development Approach and Key Tasks
To achieve the development goals of our province’s software industry, we must thoroughly analyze the primary factors currently hindering its growth, adopt effective measures, and adhere to a combination of government guidance and enterprise-led development; expand the domestic application market while exploring overseas markets; integrate talent cultivation and recruitment with the establishment of enterprise innovation mechanisms; enhance scientific and technological innovation capabilities; foster products with independent intellectual property rights; and cultivate a group of leading software enterprises capable of driving industry growth, thereby advancing the overall development of our province’s software industry.
(1) Encourage Application and Stimulate Domestic Demand to Promote the Development of the Software Industry. The development of the software industry must be application-driven. We must implement the policy of “using informatization to drive industrialization,” widely apply information technology across all sectors of the province’s national economy and social development, and vigorously implement the manufacturing informatization initiative.We will encourage and guide software enterprises to establish long-term cooperative relationships with the province’s traditional pillar industries—such as machinery, chemicals, metallurgy, textiles and apparel, building materials, and light industry—to forge a new path of industrialization that integrates traditional industries with information technology. We will promote the extensive adoption of software products and services within the service sector and actively foster the development of the information services industry. By advancing the province’s informatization process and integrating informatization construction with the development of the information industry, we will drive the accelerated growth of the software industry.Provincial informatization projects—including e-government, e-commerce, industry-specific informatization, and digital cities—shall prioritize providing application markets for domestic software enterprises and actively organize and implement a series of software industrialization demonstration projects.
(2) Strengthen research and development of software products. Enhance technological and management innovation to bolster the sustainable growth potential of enterprises. Establish a software technology innovation system integrating enterprises, universities, and research institutes. Support and encourage qualified provincial software parks, enterprises, research institutes, and universities to jointly establish software research and development centers with foreign enterprises.
Concentrate efforts on developing a group of key software products that have a significant impact on the software industry and national economic development, achieve breakthroughs in key technologies, improve the independent R&D capabilities and standards of the province’s software industry, and enhance market competitiveness.Priority support will be given to the research and development of software middleware, databases, embedded software, cybersecurity software, application software for key industries, industrial automation software, and enterprise information management software. We will implement software development process management, project management, and human resource management; emphasize the development of standardization and quality systems; promote the application of software components and reuse technologies; improve enterprises’ engineering management capabilities; and achieve industrialized software production.
(3) Deepen Reforms, Encourage Competition, and Foster a Group of Leading Software Enterprises. Deepen institutional reforms, integrate software industry resources, and establish an enterprise growth mechanism that aligns with the requirements of a market economy and the development patterns of the software industry. Guide software enterprises to integrate resource advantages, strengthen corporate capabilities, expand into international markets, and enhance international competitiveness through various means such as reorganization, alliances, mergers, and public stock offerings.With a focus on industry applications, develop specialized products and value-added services to accelerate the emergence of a group of leading enterprises characterized by industry-specific features, industrial advantages, economies of scale, and strong brand images. Support and develop information service industries such as system integration, integrated circuit design, network services, information system consulting and maintenance, and outsourcing, and foster specialized software service enterprises. Encourage software development departments within various industries to transform their operational mechanisms and pursue a path of socialization, specialization, and corporatization.
(4) Accelerate the construction of provincial-level software parks. Building upon strong support for the Qilu Software Park—a national key software industry base—select eligible cities to establish provincial-level software parks. We must mobilize the initiative at all levels, pool limited financial and human resources, create a favorable environment for product development and operations, generate agglomeration effects, form relatively concentrated software industry bases, and support and nurture a large number of software enterprises.During the 10th Five-Year Plan period, the province will focus on developing four major software parks: Qilu Software Park, Qingdao Software Park, Yantai Software Park, and Weihai Software Park, forming a “One Park, Three Locations” development pattern led by the national key software industry base—Qilu Software Park. High-tech development zones and economic development zones in other cities should also actively support and foster the development of the software industry.
(5) Accelerate the internationalization of the software industry. Developing software exports is a key pathway for accelerating the growth of our province’s software industry. We must intensify the opening up of the software industry to the outside world, actively leverage the role of intermediary organizations such as software industry associations and import-export chambers of commerce, guide enterprises to strengthen exchanges and cooperation with foreign counterparts, and introduce advanced technologies, management concepts, capital, and talent to enhance the management standards and R&D capabilities of software enterprises.By undertaking commissioned processing projects and encouraging software exports, we will align with international standards, increase the technological content and added value of exported software, and gradually expand software exports to include application services, system engineering contracting, and software products with independent intellectual property rights. Special emphasis should be placed on cooperation with Southeast Asian countries and regions, as well as major software-producing nations such as the United States, India, and Ireland, to fully leverage geographical advantages and cost advantages in human resources to develop overseas markets.
(6) Focus on the market, cultivate talent, and provide intellectual support for the development of the software industry.
Create a favorable environment for utilizing, attracting, and cultivating talent, and prioritize talent development as the top priority in the software industry’s growth. Implement a policy that combines training, recruitment, and utilization; strengthen institutional innovation; and improve talent incentive mechanisms. Through various channels such as academic education, vocational education, continuing education, and training, accelerate the development of a high-quality workforce for the software industry.All localities and departments must attach great importance to this matter, incorporate software personnel training into talent recruitment plans, and allocate a certain proportion of software personnel to participate in training each year within talent recruitment projects.
IV. Major Policy Measures
We will continue to fully and thoroughly implement the spirit of relevant national and provincial documents, earnestly address the contradictions and issues constraining the development of our province’s software industry, and create a favorable environment for its growth. All relevant parties must fully leverage their roles, cooperate closely, and increase support for the development of the software industry.
(1) Increase financial investment in the software industry.
1. Establish a diversified, multi-tiered, and multi-channel investment and financing system guided by government investment, with social and corporate investment as the mainstay, and operated on a market-oriented basis, to increase investment in the software industry. Funds available for software industry development—such as the special funds for scientific and technological innovation, the three categories of science and technology expenses, the innovation fund for science and technology-based small and medium-sized enterprises, and the special funds for electronic development—jointly allocated by relevant departments and the provincial finance department, shall be appropriately directed toward the software industry through structural adjustments.The provincial finance department may allocate a certain amount of funds annually, subject to fiscal capacity, as a special fund for software industry development, specifically designated to support the sector. The provincial government shall allocate a certain amount of funds annually for the development and construction of key industrial parks. Software enterprises recognized as high-tech enterprises and software products included in provincial-level or higher new product plans may enjoy the special fiscal support policies stipulated in the “Decision of the CPC Shandong Provincial Committee and the People’s Government of Shandong Province on Further Accelerating the Development of the High-Tech Industry” (Lu Fa [2002] No. 8).
2. Actively guide and promote software enterprises to fully utilize the capital market to raise funds through multiple channels and in various forms. Promote the establishment of a venture capital mechanism for the software industry, and encourage and support domestic and foreign venture capital investment in the province’s software industry. The Provincial High-Tech Investment Fund shall prioritize the software industry as a key investment target. Encourage and support financial institutions to provide credit support to the province’s software enterprises through credit guarantees.Vigorously cultivate and support leading software enterprises in raising funds through methods such as issuing bonds, listing shares on domestic and international securities markets, issuing convertible bonds, and implementing asset restructuring. Encourage software enterprises with promising market prospects and talent advantages to contribute high-tech achievements, intellectual property, and other intangible assets as equity capital; the proportion of the total value of such intangible assets to the enterprise’s registered capital may be determined by the investors within the scope permitted by law.
(2) Give Priority to Domestic Software Products and Services.
1. Actively recommend and select outstanding software products from our province, and include them in the government procurement catalog. Under equal conditions, government agencies shall give priority to procuring outstanding software products from our province or software products from enterprises outside the province that have invested (through joint ventures or equity participation) within the province. When enterprises and institutions purchase software, if the acquisition cost meets the criteria for fixed assets or constitutes intangible assets, it may be accounted for as fixed assets or intangible assets.For domestic enterprises and foreign-invested enterprises with an investment amount of less than US$30 million, the depreciation or amortization period may be appropriately shortened, with a minimum of 2 years, subject to approval by the competent tax authority. For production equipment of integrated circuit manufacturing enterprises, the depreciation period may be appropriately shortened to a minimum of 3 years for domestic enterprises and foreign-invested enterprises with an investment amount of less than US$30 million, subject to approval by the competent tax authority.
2. We encourage capable domestic and foreign enterprises to participate in the province’s informatization initiatives. Moving forward, government-funded informatization projects must be conducted through competitive bidding, and funds allocated for the purchase of software products and services shall, in principle, not be less than 30% of the total investment.Government agencies and public institutions funded by the budget shall purchase software products involving national security through government procurement procedures. Software security products may only be sold in this province after being certified by a national information security certification authority. The use of software for enterprise technological transformation is encouraged to enhance corporate innovation capabilities and promote industrial upgrading. Funds required for transformation projects may be applied for through provincial interest subsidies for technological transformation loans and software industry development funds.
3. Implement a qualification management system for software enterprises and system integration enterprises. Establish the Provincial Information Technology Construction Project Bidding and Supervision Certification Center as soon as possible to implement a province-wide bidding and supervision system for information technology projects. When conducting bidding, project owners must prioritize the construction and service capabilities of contractors. For all major information technology projects within the province, contractors must be capable of providing localized services.
(3) Strengthen support for software exports.
1. Building upon the “One Park, Three Locations” framework, we will develop our province’s coastal regions into a major domestic software processing and export base. We will attract foreign enterprises to establish software processing and export enterprises within our province and encourage collaboration with foreign software enterprises or professionals through asset partnerships to expand into overseas markets.Software export enterprises within the base may open foreign exchange accounts under the current account. The scope of income for these accounts includes foreign exchange receipts under the current account, while expenditures include foreign exchange payments under the current account and approved foreign exchange payments under the capital account.
2. For recognized software production enterprises importing equipment for their own use, as well as technology (including software), supporting components, and spare parts imported in accordance with contracts alongside such equipment,no confirmation letter is required, and such imports do not count toward the total investment amount. Except for goods listed in the "Catalog of Imported Goods Not Eligible for Tax Exemption for Foreign-Invested Projects" and the "Catalog of Imported Goods Not Eligible for Tax Exemption for Domestic Investment Projects" as stipulated in State Council Document No. 37 [1997], these imports are exempt from customs duties and import-stage value-added tax.
3. To support software product exports, any software enterprise with a registered capital of 500,000 yuan or more may obtain independent import and export rights. Support will be provided for software enterprises to establish overseas branches, including guidance and assistance with establishment and procedural formalities. Software export enterprises participating in specialized international exhibitions or new market development activities will receive support from the SME International Market Development Fund.
4. Software export enterprises are encouraged to obtain GB/T 19000-ISO 9000 series system certification and CMM certification. For enterprises eligible for funding from the SME International Market Development Fund, certification costs for GB/T 19000-ISO 9000 series system certification and CMM Level 2 certification or higher, as certified by a nationally recognized accreditation body, will be subsidized by the SME International Market Development Fund.
(IV) Enhancing Enterprises’ Technological Innovation Capabilities.
1. Select 10 software enterprises with promising product market prospects, high management standards, and strong innovation capabilities to be designated as key enterprises receiving priority support within the province. Provide focused support in areas such as policy, funding, procurement, and market listing to accelerate their development and enable them to become leading enterprises driving the rapid growth of the province’s software industry.During the 10th Five-Year Plan period, priority support will be given to key enterprises such as Zhongchuang Software and Inspur Software. These key enterprises will actively engage in outsourcing services to form a software development and production industrial chain, thereby driving the joint development of small and medium-sized software enterprises.
2. Select a number of well-qualified enterprises to establish national and provincial software engineering research and development centers, which will primarily undertake software R&D tasks. In the near term, priority support will be given to establishing a provincial software middleware industrialization base to accelerate the development of software middleware and foster new economic growth points.
(5) Accelerate the development of the software talent pool.
1. Higher education institutions should strengthen the development of computer science and software programs to cultivate high-level software design, development, and management talent urgently needed by society. Based on key secondary vocational schools with good educational facilities, 1–2 software vocational and technical colleges should be established to create training bases for “software blue-collar” workers, meeting the needs of industrialized software production and expanding employment opportunities.Domestic and foreign universities, educational institutions, and renowned software enterprises are encouraged to collaborate on educational programs or establish software vocational training institutions to cultivate high-level talent in system analysis, design, and management.Researchers from higher education institutions and research institutes are permitted, with the consent of their employing units, to establish or be employed by software enterprises on a full-time or part-time basis to conduct research and development of software products; higher education institutions and research institutes are encouraged to hire senior corporate executives and technical personnel as part-time professors or researchers; higher education institutions and research institutes may collaborate with software enterprises to jointly train graduate students; and graduate students are permitted to establish software enterprises while retaining their student status for a certain period.
2. Individuals who have obtained long-term (permanent) residency abroad or have already established companies (enterprises) overseas may, upon verification of their status, register as foreign-invested enterprises and enjoy the preferential policies applicable to foreign-invested enterprises in this province; other overseas students, upon verification of their status, may register as domestic enterprises and enjoy relevant preferential policies.Overseas students are encouraged to bring software processing projects to our province to engage in software product development and production operations. Freedom of movement for overseas students is guaranteed, as is the freedom to remit their lawful personal income.
3. Professional and technical personnel and managers who make significant contributions to the industrialization of software development achievements shall be commended and rewarded in accordance with relevant regulations. The portion of rewards provided by enterprises to software personnel in the form of in-kind benefits may be included in the enterprise’s total wage bill. Pilot programs for stock option plans in software enterprises shall be implemented to mobilize enthusiasm from all parties.
4. Entry and exit approval procedures for managers and technical personnel of software enterprises will be streamlined, adopting the method of “single approval valid for multiple trips abroad within one year.” Managers and technical personnel of software enterprises who frequently travel to and from Hong Kong and Macao for business purposes may apply for multiple-entry visas to Hong Kong and Macao.
(6) Regulate the software market order and establish a system for the protection of software intellectual property rights. Encourage software enterprises to strengthen the registration of software copyrights. Conscientiously implement the Copyright Law and the Regulations on the Protection of Computer Software; relevant government departments shall organize regular or irregular campaigns to combat the smuggling and piracy of software, and severely investigate and punish activities involving the organization, production, and sale of pirated software.No entity shall use unauthorized software products in its computer systems; any software enterprise found to be producing, selling, or distributing pirated software shall have its software enterprise qualification revoked immediately upon verification. Government departments must lead by example, encouraging enterprises, public institutions, and society at large to use genuine and domestically produced software. Governments at all levels and publicly funded institutions shall provide necessary financial support for the purchase of genuine software for their own use.
All localities and departments must conscientiously fulfill their duties, formulate policies to encourage the development of the software industry in accordance with local conditions, and resolve major issues encountered in the industry’s development. Departments must effectively transform their functions, enhance their service orientation, streamline work procedures, improve administrative efficiency, and strengthen the certification and accreditation of software enterprises and products. This will ensure the full implementation of national and provincial preferential policies and actively foster a healthy market for the software industry.
